You pay for the food, I can't deduct it from my corporate tax.
Posted: Sun Dec 22, 2024 5:00 am
During these dates, public relations expenses with clients and suppliers increase, credit cards are used at will , it is an excellent time to strengthen business relationships, but we must know that not all representation expenses are deductible in corporate tax.
We give our best client a gift, we go to eat and talk about business, put your wallet away, you are invited. Many good deals are made over a table and a tablecloth, a good wine to be more comfortable and in the end an important deal is closed. But, is the expense correlated with the income? Where does business end and friendship begin? Is it justifiable to pay for a seafood platter for the best client?
Points to consider when deducting representation expenses in corporate tax
To be deductible, they must new zealand girls whatsapp number be related to income , meet the legally established conditions for accrual and be duly justified.
The reality of the operation generating the expense must be proven by any means of proof admissible by law, and the justification of the expense must be provided primarily by means of an invoice.
Article 14 of the Corporate Tax establishes that "liberalities" (those in which the relationship between the expense and the promotion of the activity is not proven) will not be tax-deductible expenses, but clarifies that the concept of "liberality" does not include expenses for public relations with clients or suppliers , or those made in accordance with customs and practices with respect to the company's staff, or those made to promote, directly or indirectly, the sale of goods and the provision of services, or those that are correlated with income.
New things to keep in mind from 2015
From 2015 onwards , when we sit down at the table with our clients, even if the meal is to close an excellent business deal, if we want to be sure that the expense is deductible, we must look at the company's turnover and what we have spent, since from next year onwards, expenses for customer service will be deductible if they are justified and related to the activity, but only for the part that does not exceed 1% of the company's turnover.
We give our best client a gift, we go to eat and talk about business, put your wallet away, you are invited. Many good deals are made over a table and a tablecloth, a good wine to be more comfortable and in the end an important deal is closed. But, is the expense correlated with the income? Where does business end and friendship begin? Is it justifiable to pay for a seafood platter for the best client?
Points to consider when deducting representation expenses in corporate tax
To be deductible, they must new zealand girls whatsapp number be related to income , meet the legally established conditions for accrual and be duly justified.
The reality of the operation generating the expense must be proven by any means of proof admissible by law, and the justification of the expense must be provided primarily by means of an invoice.
Article 14 of the Corporate Tax establishes that "liberalities" (those in which the relationship between the expense and the promotion of the activity is not proven) will not be tax-deductible expenses, but clarifies that the concept of "liberality" does not include expenses for public relations with clients or suppliers , or those made in accordance with customs and practices with respect to the company's staff, or those made to promote, directly or indirectly, the sale of goods and the provision of services, or those that are correlated with income.
New things to keep in mind from 2015
From 2015 onwards , when we sit down at the table with our clients, even if the meal is to close an excellent business deal, if we want to be sure that the expense is deductible, we must look at the company's turnover and what we have spent, since from next year onwards, expenses for customer service will be deductible if they are justified and related to the activity, but only for the part that does not exceed 1% of the company's turnover.